Why do Traders Keep Killing Bond Vol

Yet again we are ahead of a FOMC meeting.  Yet again people are paying close attention to what the fed might say.  Also, yet again, traders are obliterating TLT premiums ahead of the FOMC.  This seems a little silly given that 10 and 20 day HV are near the bottom part of their current trading zone.


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TLT Vol is Too Cheap Again

We have noticed that trader do not seem to love buying bond volatility.  Considering how much TLT moved today, and has moved over the last few weeks (I mean look at those gaps and candles).  How is it possible that that IV can be trading in line with 10 and 20 day HV.  The options appear to be too inexpensive.


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